Histone acetylation and deacetylation have been implicated in the regulation of gene expression. Molecular studies have shown that histone deacetylases (HDACs) function as transcriptional repressors. However, very little is known about their roles during development in multicellular organisms. We previously demonstrated that inhibition of maternal and zygotic expression of histone deacetylase 1 (HDA-1) causes embryonic lethality in Caenorhabditis elegans. Here, we report the identification of an hda-1 genetic mutant which has also been called a gon-10 mutant (for gonadogenesis defective 10) and show that loss of HDA-1 zygotic expression results in specific postembryonic defects in gonadogenesis and vulval development. We provide evidence that the lag-2 gene, which plays a role in gonadogenesis and vulval development and encodes a Notch ligand, is derepressed in gon-10 animals, suggesting that lag-2 may be a target of HDA-1. Our findings reveal a novel and specific function for the ubiquitously expressed HDA-1 in C. elegans gonadogenesis and place hda-1 in the Notch signaling pathway.